China developing sizeable stakes in Afghanistan

By Khalid Hasan

WASHINGTON: China is keen to seize as large a share as possible of Afghanistan’s natural resources as it can and is likely to be successful given its good standing in Afghanistan, ability to distort the market and fiscal wherewithal to outbid its competitors, according to an American analyst.

Nicklas Norling, writing in the current issue of Analyst, a publication of the Central Asia-Caucasus Institute based at Johns Hopkins University, says China remained disengaged in Afghanistan until Afghan President Hamid Karzai’s government recently opened up its energy, mineral, and raw materials to foreign investors. He writes that the Chinese exploration of the Aynak copper field is likely the start of Beijing’s drive to seize as large a share as possible of Afghanistan’s natural resources. Afghanistan has large energy and mineral resources, particularly in copper. China is likely to emerge as a large investor in the country, and its interest in Afghanistan is likely to increase but continue to be overall peripheral to its strategic concerns compared to Pakistan and the Central Asian countries, Norling asserts. China showed little interest in Afghanistan throughout the 20th century but its growing energy and natural resource demand combined with increasing Afghan openness to foreign investors have alerted Beijing of the country’s potentials, he adds.

Norling, who is based in Stockholm, says China showed little interest in the reconstruction of Afghanistan following the overthrow of the Taliban, and that Beijing’s bilateral assistance and aid to Kabul have been extremely limited, even if bilateral trade has steadily increased. According to some sources China has now, together with Pakistan, emerged as a main exporter to Afghanistan while a few Chinese companies were also active in Afghanistan in the immediate aftermath of Operation Enduring Freedom, Norling adds. Chinese companies ZTE and Huawei partnered with the Afghan Ministry of Communications to implement digital telephone switches, providing roughly 200,000 subscriber lines and China has also taken part in the Parwan irrigation project, restoring water supply in Parwar province, as well as the reconstruction of the public hospitals in Kabul and Kandahar, Norling argues. The EU has hired Chinese firms for various construction projects in Afghanistan, including road restoration activities he writes.

According to the piece, there are several factors that suggest China is set to increase its investments in Afghanistan in the near future. Afghanistan has unexplored reserves of oil and natural gas in the northern parts of the country. The Afghan oil reserves were recently upgraded 18 times by a US geological survey, estimates standing at a mean of 1,596 million barrels, while Afghanistan’s natural gas reserves were upgraded by a factor of three, standing at a mean of 15,687 trillion cubic feet (Tcf). Afghanistan also has large iron ore deposits between Herat and the Panjsher Valley, and gold reserves in the northern provinces of Badakshan, Takhar, and Ghazni. Major copper fields also exist in Jawkhar, Darband, and in abovementioned Aynak, located around 30 km southeast of Kabul. All of these resource-rich areas are also situated in the relatively stable northern and northwestern regions.

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